The New New Thing: A Silicon Valley Story (13 page)

One evening the next year, when Kittu was in the seventh grade, he fought with his father—about what he does not recall. But he had gone off to a corner of the house and curled up to sleep. “Then my father comes over and is being very friendly. He is smiling. And I say, ‘What the fuck is wrong with this guy?’ An hour ago he was being an asshole! And he says, ‘Swaroop—that was what I was called then—the principal just called and said they want to take your picture for the newspaper!’” In the general tests administered to Indian seventh-graders, Kittu had come in first in his region. His region contained eighty million people. “It was one of those moments,” said Kittu. “When you say, ‘Whoa! I knew I was good. But I didn’t know I was
this
good.’ After that it became a complete obsession for me. I was going to go to an IIT. My dad would come into my room at three in the morning, and I’d be studying! He would say, ‘Swaroop, you must go to sleep, you know.’”

Kittu, like Pavan, left India the minute he graduated from his IIT. After the requisite two years inside some American graduate school, which the Indians treated as a weigh station en route to Silicon Valley, Kittu had landed his job at Silicon Graphics. Not long after that he met Clark. And not long after that he found himself a kind of professional observer of Clark’s quest for the new new thing. Jim Clark’s mind was Kittu’s hobby; Kittu was fascinated that such a technically minded person could be so happy groping blindly toward big piles of money. “Jim Clark has a clarity of vision that is prompted by the purest form of greed,” says Kittu. “Nothing clouds it.”

Like the other young programmers in the ITV department, Kittu could have had himself a job at Netscape the day the company was founded simply by turning up at the front door. “I knew that I was making a mistake by not joining Jim at Netscape,” he says. “So many times Jim has said, ‘I told you so.’ And I assumed he would say, ‘I told you so,’ again. But I didn’t know how loudly he would say, ‘I told you so.’” His failure to join Netscape was the biggest financial mistake Kittu hoped he would ever make. In December 1995 he remained a Silicon Graphics employee earning a salary of $89,000. Had he followed Clark into Netscape, he would have been worth $20 million.

Like Pavan Nigam—like pretty much every engineer at Silicon Graphics—Kittu saw a certain injustice in this. He viewed the computer engineers at Netscape as ever so slightly second-rate. Certainly, the best and the brightest had not left Silicon Graphics to join Clark. “Technically the Netscape browser was not much of an accomplishment at all,” Kittu says. It did not belong on the same page with what he and Pavan and the others had achieved in Orlando. Kittu could rattle off all the technologies brought together to create the world’s first interactive television: 3-D graphics, 2-D graphics, ATM, frequency modulation, IMP1, IMPEG2, switching, infrared, a blizzard of baffling terms that leaves the outsider with the clear opinion he does not want to know any more than he needs to. “We got all wrapped up in the technology,” Kittu says. “We all thought, ‘Dammit this technology is so
cool
. It must bring so much value to
someone
.’”

This puts a fine point on a painful truth: the purpose of that technology was
to make money
. The higher purpose of the interactive television was to facilitate the stupor of the guy on the couch with the beer in one hand and the remote control in the other—which is to say that it had no higher purpose. Its lack of any higher purpose made its ultimate failure even more absurd. “ITV was, from a technical standpoint, as challenging as putting a man on the moon,” says Kittu, “and in the end, it was one great academic exercise. A waste of fucking time.”

Netscape, on the other hand, was clearly not a waste of time. “The trick to Netscape was
markets
,” says Kittu, “being at the right place at the right time. And that was all Jim Clark. If Jim Clark had not been there, Marc Andreessen and his friends would still be working for their Ph.D.’s at the University of Illinois.” Thanks to Jim Clark the B team had got rich while the A team stayed middle class, at least in Kittu’s view. Some engineers, especially the older ones, passed this off to the different “risk profile” of engineers who created new companies. The implication was that really brilliant engineers like Pavan and Kittu did not have the taste for risk required to take a flying leap into one of Jim Clark’s fantasies.

Only now they did.

Clark was onto something when he went looking for Indians. It wasn’t just that half his work had been done for him by the Indian government. It wasn’t just that, next to the sifting mechanism through which Pavan and Kittu had passed, the Harvard admissions office was a kind, forgiving place. It was that any person with the brains to get into the IIT’s
and
the gumption to get himself to the United States was capable of all manner of miracles. The Indian engineers had the lust for the kill that Clark loved. They were ferociously, recklessly competitive. Pavan and Kittu had finished in the top one-hundredth of one percent on the test taken by bright young Indians who probably were already in the top one-hundredth of one percent on the national brainpower scale. Yet about twice a week Pavan found a way to remind Kittu that he had finished 250 places behind him.

To Kittu the suggestion that he was too smart to take risks was “total bullshit.” In the first place, how much risk was there in working for a Silicon Valley start-up? The worst thing that happened is that the start-up failed, and you went back to your old job and your $80,000 a year. Silicon Graphics or any other big company would have hired them back the instant they applied. In the second place, his life had been nothing but risk: the risk of growing up in a Third World hellhole, the risk that he wouldn’t get into a decent school that might catapult him out of the hellhole, the risk that he wouldn’t find work in the United States, the risk that ITV, the highest-profile engineering project in Silicon Valley, would flop. So far as Kittu was concerned, he’d lived his life on a high wire without a safety net. Watching the B team of computer science whooping it up down the road after the Netscape public offering enraged him. “I’ll tell you what I knew on the day Netscape went public,” he says. “I knew two things. I knew my next company would be a start-up. And I knew that anything smaller than Netscape was unacceptable.”

That day in December 1995, after Jim Clark showed him the Magic Diamond with Healthscape at the center, Pavan went back to his job at Silicon Graphics. He asked Kittu to take a walk with him. The two men spent several hours walking along the manicured lawns of Shoreline Boulevard, down by the marshy reaches of the Bay where they were less likely to be seen. Pavan told Kittu about the Magic Diamond. Kittu had only one clear thought about it: “No freaking way I was going to miss this one.”

Of course, Pavan was not supposed to tell anyone about anything. When that afternoon he confessed to Clark that he’d spoken privately to Kittu, he also confessed his new problem. Tom Jermoluk (T. J.), the CEO of Silicon Graphics, had come to him and asked him to promise he would not steal any Silicon Graphics employees. T. J. had himself just decided not to jump to Clark’s new venture. And so, strictly speaking, Pavan could not recruit Kittu without breaking his promise. But there was nothing other than the fear of Ed McCracken’s lawyers to prevent Clark from calling Kittu on Pavan’s behalf, just to get things rolling. And so Clark did. And so once again Kittu found himself the surprising recipient of a call from Jim Clark. Clark asked Kittu to stop by his house as soon as possible.

Kittu stopped by the next day. He’d already made up his mind, the instant Pavan told him about the Magic Diamond. So far as he was concerned, all that was left was to negotiate the number of stock options he would receive. Moreover, he was thrilled by the invitation to visit Clark at his home. “But you know something,” he says, “I was not nervous at all. I could have gone to work
anywhere
. The fact that Jim Clark wanted me was enough. There’s no way you can’t follow Jim Clark.” Like Pavan, Kittu had absorbed the essential lesson of interactive television: do what Clark did, not what he said to do. Kittu rolled into Clark’s blond pebbled driveway and gazed up at the big house with the man-made hill at the back and the cardboard boxes in the guest bedroom and the old tuba beside them. There were about six shiny sports cars in the driveway; it could have passed for a small dealership. Clark ambled out of the house to greet him. He had his easy manner on.

Clark was fond of saying that “there’s nothing that gets you interested in money like having some of it.” Now that he had a billion dollars, his life had become a great deal more…financial. He truly loved money, money truly loved him, and he wanted all the people he liked to be a part of the new relationship. He had just himself reached the point where he associated the word “dollars” not with “millions” but with “billions.” He wanted to help Kittu get over his old habit of thinking “thousands” and into the new one of thinking “millions.” Soon enough he was telling Kittu his favorite parable of missed opportunity. He had bought his house with the blond pebbled drive right after Silicon Graphics went public, back in 1986. To pay for the house he had sold one million shares of Silicon Graphics stock at $3 a share. The stock was now at $30 a share. “You see that house,” Clark said to Kittu, making the obvious calculation, “that’s my $30 million house.”

Kittu didn’t miss a beat. He turned around and pointed to his dusty Toyota and said, “Jim, you see that car. I sold two thousand shares of Silicon graphics at $10 a share to buy that car. So that’s my $60,000 Toyota Camry.”

That day Kittu returned to SGI to give notice. He was willing to stick around a few weeks and help his managers smooth the transition. But already his managers were in a state of high paranoia: people had heard that Jim Clark had a new start-up and that he had spoken about it to Pavan. Kittu’s manager accused him of plotting to steal other engineers. “And so,” recalls Kittu, “I just said, ‘Fuck you, I resign.’”

P
avan Nigam resigned from Silicon Graphics on a Friday afternoon in February 1996. He had no idea who might join him, aside from Kittu. He still suspected that
no one
would join and that he would become a Silicon Valley laughingstock. So far as he knew, the only people aware of what he was up to were him, Kittu, Clark, and a few of Clark’s venture capitalists.

When he arrived home that evening, he found that several dozen people had faxed their résumés to his home machine. On Saturday morning his phone began to ring. It never stopped. The first callers were engineers Pavan knew from Silicon Graphics. Within a few hours the callers were complete strangers, who worked for companies Pavan had never heard of. By late afternoon the calls were coming thick and fast: the moment Pavan ended one conversation, the phone rang and he started all over again. All the callers wanted one thing: a job with Pavan’s new company.

Soon enough it was clear to Pavan that he was in a buyer’s market for engineering talent. He needed only a dozen or so extraordinarily talented people to get the company off the ground. Once he realized how many people wanted to work for him, his manner became noticeably more gruff. When he’d pick up the phone, he wouldn’t even bother to say hello. He’d say, “Why are you calling me? What can you do for me?” By Sunday morning the engineers who had been unable to get through to Pavan on the phone started turning up at his front door. By Monday morning more than three hundred engineers had faxed résumés to his home machine, and countless others had phoned, to apply for a job with Healthscape. And none of them had the faintest idea what Healthscape was.

From this initial group of three hundred—a
far
bigger group stormed the gates later—Pavan culled his favorite Silicon Graphics engineers. After Kittu he picked Shankar. After Shankar he picked Motasim. After Motasim he selected Flavio. After Flavio he picked…well, you get the idea. Soon he had ten of the smartest engineers he knew, all of whom had built the world’s first interactive television. Two were Italian, one was Chinese, most of the rest were Indian.

Pavan and Kittu and the others assembled on February 19, 1996, in a dinky office in downtown Palo Alto. It was a year or so after Hillary Clinton finally abandoned her hope of reforming the U.S. health care industry from the White House. Six Indians, two Italians, a Japanese, and a Belgian were going to do it from Northern California. Of course, none had the first clue what it was they were meant to be doing. “It was very, very fuzzy,” says Motasim Najeeb. “We didn’t have a single line of code. We had nothing, really. HMO. PPO. All these names!” “I was asking for a business plan,” recalls Shankar Srinivasan. “And there wasn’t one! Pavan’s notion in general was just to get enough bright people and throw them at the problem, and something good will come out of it.” As Kittu puts it, “No one knew a fucking thing about health care.” The thought clearly pleased him.

On February 19, 1996, the ten young engineers came to work; on February 20 they flew to Boston to meet with Blue Cross/Blue Shield. Most of them had never heard of Blue Cross/Blue Shield. Here’s how Shankar Srinivasan recalls his bizarre first brush with a tiny appendage of the U.S. health care industry: “The first day was for them to tell us what they did and what they needed. The second day was for us to tell them what we were going to build. In between the first day and the second day, we had to figure that out. We sat up all night reading all this literature about health care. We asked, ‘What is the problem we are going to solve here?’ All we had was Jim Clark’s concept.”

Pavan’s engineers had no experience and no knowledge. But they had arrogance, ambition, and a blissful ignorance of the magnitude of what they were aiming to achieve. They had something else too: the faith that they could impose technology on others. In short, they behaved as people always have at the cutting edge of capitalism, with the conviction that they could remake the world in their image. They worked mad hours—many of them sent their families back to India. One morning at eight Clark showed up on his motorcycle to have a look around. He noticed Panos, a Greek engineer, tucked behind his computer work station. He said, “You’re here early.” Panos looked up and said, “I never left,” and went back to work. “The passion, the fire was there,” says Kittu. “There was a feeling that we were about to change the world. And we all now knew that was how you made money, by changing the world.”